Price Determination of coffee at Bugisu Co-operative Union Limited
BCU ltd sets its prices basing on the ruling indicative World Coffee Prices considering differential to the buyer. Negotiations between the Union and the prospective buyers are based on that factor together with the price the Union would offer to its farmers.
The Union (BCU) prefers to offer 80% of the realized price, after sale, to its farmers to encourage farmers produce good quality product since the Union (BCU) is a farmer’s organization. The Union also tries to pay second payment (price) together with a quality bonus.